West Pharmaceutical Services delivered a quarter that outperformed Wall Street’s expectations, reflecting renewed strength in its core high-value product (HVP) components. Management attributed the results primarily to robust demand for GLP-1 elastomer products, ongoing conversions to HVP driven by regulatory upgrades, and the normalization of customer ordering patterns. CEO Eric Green highlighted that the company’s proprietary products segment saw particularly solid growth, with HVP components increasing 11.3% as West leveraged its pandemic-era investments to meet rising demand. Green explained, “Our improved performance was concentrated in our higher-margin businesses, which drove favorable margin expansion in the quarter.”
Is now the time to buy WST? Find out in our full research report (it’s free).
West Pharmaceutical Services (WST) Q2 CY2025 Highlights:
- Revenue: $766.5 million vs analyst estimates of $725.9 million (9.2% year-on-year growth, 5.6% beat)
- Adjusted EPS: $1.84 vs analyst estimates of $1.51 (22% beat)
- Adjusted EBITDA: $196.7 million vs analyst estimates of $176 million (25.7% margin, 11.8% beat)
- The company lifted its revenue guidance for the full year to $3.05 billion at the midpoint from $2.96 billion, a 3% increase
- Management raised its full-year Adjusted EPS guidance to $6.75 at the midpoint, a 8% increase
- Operating Margin: 20.1%, up from 18% in the same quarter last year
- Market Capitalization: $17.92 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions West Pharmaceutical Services’s Q2 Earnings Call
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Paul Richard Knight (KeyBanc): Asked about the growth of Crystal Zenith products. CEO Eric Green attributed demand to a specific drug launch and noted increased interest from customers, calling the momentum encouraging but tied to product timing.
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Justin D. Bowers (Deutsche Bank): Inquired about destocking in generics and long-term growth. Green acknowledged ongoing destocking but highlighted that HVP components are the main growth lever, with stronger performance anticipated in the second half of the year.
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Daniel Louis Leonard (UBS): Questioned whether the guidance raise was solely due to the Q2 outperformance. CFO Bernard Birkett clarified that the upgrade reflects both the Q2 results and sustained optimism for HVP growth in the second half, with no major pull-forward dynamics observed.
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Douglas Anthony Schenkel (Wolfe Research): Probed the company’s path to normalized growth and tariff assumptions. Green emphasized solid momentum in HVP components and operational progress, while Birkett said tariff guidance is based on current rates and ongoing mitigation efforts.
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Matthew Richard Larew (William Blair): Asked about labor constraints in Europe and their resolution. Green explained that hiring and training efforts are underway, with the goal of ramping capacity and alleviating the bottleneck as the year progresses.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) the pace at which Annex-1 upgrade projects convert into commercial revenue, (2) whether the company can resolve labor constraints and expand production output at its European HVP plants, and (3) the resilience of biologics and GLP-1 demand amidst shifting healthcare trends. Developments in tariff policy and the successful ramp-up of SmartDose automation will also be important indicators of execution.
West Pharmaceutical Services currently trades at $246.42, up from $227.34 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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